KBC Bank Sees Opportunity During Economic Uncertainty

Customer Experience
Customer Experience

While many financial firms see the current economic situation as a detriment to business, KBC Bank sees opportunity. The Belgium-based bank serves more than 3 million customers, offering retail banking, insurance, and asset management services at its 879 branches. Rudi Peeters, KBC's general manager of marketing, recently sat down for a 1to1 on the Run podcast about his company's strategy during the downturn. Below is an excerpt.

How has the current economy changed your approach to customers?

Last year, because of the financial crisis, KBC saw many customers move over from competitors to KBC. That was an opportunity to begin the relationship with a good approach. We have found that within the first six months is when you have the most potential to build share of wallet. After six months the likelihood goes down. We developed a strategy for employees to try to sign up new customers for five new products within the first six months. We made it an incentive and variable payment for branch managers, and it's one of their annual goals.

One key to the program is that we don't define which five products customers should sign up for. We leave it up to the local branches to find the products and service to meet the customer's needs. We say to the branches, "Decide based on the needs of the customer which products to discuss with the customer." It's not a short-term push. Meet their needs, give them advice, and show them that you're interested in a long-term relationship. But try, within those first six months, to sell five products of the 100 product choices we offer. You don't have to sell the most profitable product. You just have to sell a product.

Once they become customers, how do you keep the relationship strong?

We act on customer data. When they have multiple products, there is a lot of customer data to work with. We see cash flows, the shops they go to, and we get to know our customer better. Once we get to know our customers better, we can put them in the right segment, give them the right value proposal and, if they are profitable enough, a private relationship manager. For customers in the lower tiers, we proactively manage the relationship through other channels, like call centers, the Internet, etc.

Do you see customer expectations changing, especially with this new economy?

We see customers spreading out their finances among different institutions because they don't want to put all their money in one bank. And Belgium is a country where four banks control 80 percent of the market. If we put forward the best effort to serve customers and offer relevant products, we try to become their main bank. There is a huge opportunity because of multi-banking. Some banks see the idea of multi-banking as a threat, but I see it as an opportunity.

Do you have any results to share?

Every year we reach our net new customer goal of 60,000 to 70,000 per year, which is quite a lot in a saturated market. And we see market share growing slightly. We see ourselves growing more, especially among youth, than the other banks. And we also see that our customer satisfaction is growing more than the other banks, even in these hard times.

What are your next steps?

Our next steps are to take our segmentation strategy even further. We are working out which segments we will bundle together, what the key performance indicators will be, and how the implementation itself will go. We are at the beginning of this journey and hiring new customers is a key component of that. And it's about trying to improve your relationship with the customers.

Disclosure: KBC is a client of 1to1 Media's parent company, Peppers & Rogers Group.